Truist upgrades MGM Resorts, says sturdy 2023 Las Vegas Strip calendar can enhance inventory greater than 30%
MGM Resorts may very well be in for a giant rally within the new yr because of a jam-packed occasions calendar on the Las Vegas Strip, in keeping with Truist. Analyst Barry Jones upgraded the on line casino operator to purchase from maintain. He additionally hiked his value goal on the inventory to $50 per share from $40. The brand new estimate implies upside of 34% from Friday’s shut of $37.08. MGM shares popped 3.7% within the premarket. “Whereas we have traditionally been extra cautious on bear-case macro dangers to the Strip and vacation spot markets, we’d anticipate MGM to see relative outperformance in 2023 on the Strip’s sturdy occasion calendar and returning midweek enterprise journey,” Jones stated. CES, an annual commerce present for the tech trade, is slated for the primary quarter of 2023, with attendance anticipated to complete about 170,000. This occasion was held in Las Vegas final yr, however Jones famous that comps might be straightforward to beat because the omicron Covid variant breakout hindered turnout. Different occasions slated to happen on the strip embrace the Components 1 Las Vegas Grand Prix within the third quarter and the electrical Daisy Carnival within the second quarter. Attendance to the previous is anticipated round 170,000, whereas turnout for the latter is forecast at greater than 400,000, Truist stated. To make certain, Jones stated that rising flight and lodge prices may damage the inventory. Nonetheless, he thinks that “the quantity and high quality of occasions deliberate for Vegas ought to drive relative outperformance.” — CNBC’s Michael Bloom contributed reporting.